Asian markets open with mild risk appetite as led by China. The China CSI300 surges to a seven month high while SSE (LON:SSE) composite is up 2.3% at the time of writing. Major Asian indices including HK HSI, Singapore Straits Times and ASX200 are trading positive. Though, Nikkei is weighed down by disappointing Japanese GDP report and is trading flat. In other markets, WTI crude oil extends recent rally and hits as high as 44.95 so far while consolidates in tight range above 1340. In the currency markets, Sterling and Dollar are paring some of last week's loss and are mildly higher. On the other hand, commodity currencies are generally lower.
Japan GDP rose 0.0% qoq in Q2, below expectation of 0.2% qoq, and slowed from prior quarter's 0.5% qoq. GDP deflator rose 0.8% yoy versus expectation of 0.7% yoy. Looking at the details, private consumption, which accounts for 60% of GDP, rose slightly by 0.2% qoq, much slower than prior quarter's 0.6% qoq. Japan economic minister Nobuteru Ishihara noted that recovery would stay driven by private demand. But he warned of risks like slowing emerging market and impact from Brexit.
Elsewhere, UK Rightmove house prices dropped -1.2% mom in August. Swiss will release PPI in European session today. US will release Empire State manufacturing index, NAHB housing market index and TIC capital flows later today.
Looking ahead, three central bank will release minutes this week, RBA, FOMC and ECB. Markets will look for the confirmation that Fed policy makers are considering a December hike and members view on the post Brexit economic outlook. UK, US and Canada will release consumer inflation. And down under, New Zealand and Australia will release job data, which would be influential on whether respective central banks would cut rates again. Here are some highlight for the week ahead:
- Tuesday: RBA minutes; UK CPI, PPI; German ZEW, trade balance; US CPI, housings starts, industrial production
- Wednesday: New Zealand employment; Australia wage price index; UK employment; Swiss ZEW; FOMC minutes
- Thursday: Australia employment; Eurozone current account, CPI, ECB accounts; UK retail sales; US Philly Fed survey, jobless claims, leading indicators
- Friday: Japan all industry index; German PPI; UK public sector net borrowing; Canada CPI, retail sales